What Philip Hammond said – and what he really meant

Our Chief Political Commentator reads between the lines of the Chancellor’s Autumn Statement

John Rentoul
Wednesday 23 November 2016 16:18 GMT
Chancellor Philip Hammond arriving at 10 Downing Street in London
Chancellor Philip Hammond arriving at 10 Downing Street in London (Reuters)

What he said: That decision [in the EU referendum] will change the course of Britain’s history. It has thrown into sharp relief the fundamental strengths of the British economy that will ensure our future success … But it’s a decision that also makes more urgent than ever the need to tackle our economy’s long-term weaknesses.

What he meant: The disastrous decision of the British people, which I opposed, reveals how strong the economy is, because my party has been in power for six years, and also how weak it is, because I want to be in power for the next six years to fix the failures of my predecessor.

I want to pay tribute to my predecessor, my Right Honourable Friend the Member for Tatton. My style will, of course, be different from his. I suspect that I will prove no more adept at pulling rabbits from hats than my successor as Foreign Secretary has been at retrieving balls from the back of scrums.

George Osborne was very good, he’s a Tory after all, but he was also useless, and I’ll be much better. And don’t get me started on Boris Johnson.

So we will maintain our commitment to fiscal discipline. While recognising the need for investment to drive productivity. And fiscal headroom to support the economy through the transition.

So we will abandon our commitment to fiscal discipline, and allow ourselves to borrow as much money as we like to deal with the disaster of Brexit.

Since 2010, the Office for Budget Responsibility has provided an independent economic and fiscal forecast, to which the government must respond. Gone are the days when the chancellor could mark his own homework.

Gordon Brown used to make up golden rules and then announce that he had passed them. I have that Novak Djokovic lookalike Robert Chote breathing down my neck and telling me what I can and cannot do.

Over the past year, employment grew fastest in the North East; the claimant count fell fastest in Northern Ireland; pay grew most strongly in the West Midlands; and every UK nation and region saw a record number of people in work. A labour market recovery that is working for everyone.

George Osborne used to trumpet these figures. I assumed they were rubbish but it turns out that there has been jobs miracle in all parts of the country. It was nothing to do with him and it’s nothing to do with me, but I’ll take credit for it too.

In view of the uncertainty facing the economy, and in the face of slower growth forecasts, we no longer seek to deliver a surplus in 2019-20. But the Prime Minister and I remain firmly committed to seeing the public finances return to balance as soon as practicable.

Tension between the Prime Minister and me? Perish the thought. We are both firmly committed to keeping our options as open as possible. It’s not often you have a change of government of the same party that allows you to junk everything your colleagues did. We are not going to let a good crisis go to waste. Huge extra borrowing pencilled in for just before the 2020 election.

Philip Hammond uses Autumn Statement to abolish the Autumn Statement

Today I am publishing a new draft Charter for Budget Responsibility, with three fiscal rules.

I’m not allowed to mark my own homework any more, so I will set myself tests so easy that it won’t be possible to fail.

Stripping out the effects of the Bank of England interventions, underlying debt peaks this year at 82.4 per cent of GDP and falls thereafter to 77.7 per cent by 2021-22.

If you adjust the figures in ways nobody understands, they look much better you know.

It is customary to hear representations from the shadow chancellor. The current shadow Chancellor has outperformed Ed Balls in the fiscally incontinent stakes. What we don’t know is whether he can dance.

My officials told me not to put that joke in. They have no sense of humour at all.

Which means, in the real world, it takes a German worker four days to produce what we make in five; which means, in turn, that too many British workers work longer hours for lower pay than their counterparts.

I don’t know who has been running the economy until now but they made a right mess of it. What a shambles. It’s going to take a while to sort this lot out.

My Right Honourable Friend, the Communities Secretary will bring forward a Housing White Paper in due course, addressing these long-term challenges.

I am the new no-spin, collegiate Chancellor. I don’t want to steal the limelight from my fellow cabinet ministers. So if Sajid thinks he can solve the housing crisis in this country let him make a fool of himself and leave me out of it.

This Autumn Statement commits significant additional funding to help keep Britain moving now, and to invest in the transport networks and vehicles of the future.

My wife had “keep Britain moving” in the Runnymede and Weybridge Conservative Association sweepstake.

I will commit an additional £1.1bn of investment in English local transport networks, where small investments can offer big wins.

It’s a trivial amount of money.

Our future transport, business and lifestyle needs will require world-class digital infrastructure to underpin them. So my ambition is for the UK to be a world leader in 5G. That means a full-fibre network; a step-change in speed, security and reliability.

The chap I met in the pub the other day said he had “world-class” and “step-change” in his office sweepstake.

With £110m of funding for East West Rail, and a commitment to deliver the new Oxford to Cambridge Expressway ... this project can be more than just a transport link. It can become a transformational tech corridor.

No idea what this boondoggle is but it doesn’t cost much and if I call it transformational everyone will like it.

This Government recognises that for too long, economic growth in our country has been too concentrated in London and the South-east.

The Government may recognise it but it’s not what I said at the start of this speech, when I boasted about job creation in the North-east and Midlands. I can’t decide whether to agree with people when they moan about London’s domination or to try to point out some contradictory evidence.

Having run two large spending departments in previous roles, I came to this job with some very clear views about the relationship between the Treasury and spending departments. [So] I will allow up to £1bn of the savings found by the efficiency review in 2019/20 to be reinvested in priority areas and I have budgeted today accordingly.

I am not an ambitious man, but it will do me no harm with my cabinet colleagues if I let them keep some of the savings they find.

We will abolish the tax advantages linked to Employee Shareholder Status in response to evidence it is primarily being used for tax-planning purposes by high-earning individuals.

Another of George’s daft schemes. I could have told him it would be exploited by rich tax avoiders because I used to run a business.

There is one tax reform the Government has pursued since 2010 to improve the lot of working people. Raising the tax-free personal allowance. When we entered government in 2010 it was £6,475. Now, after six years it is £11,000, and will rise to £11,500 in April.

I have nothing to announce, so I will just rehearse the past glories of Liberal Democrat policy in the coalition government.

We believe that a market economy is the best way of delivering sustained prosperity for the British people. We will always support a market-led approach; but we will not be afraid to intervene where there is evidence of market failure. We will look carefully over the coming months at the functioning of key markets, including the retail energy market, to make sure they are functioning fairly for all consumers.

Ignore everything before the “but”. I stuck this bit in to keep the Prime Minister happy, with her ridiculous Ed Miliband-style anti-business rhetoric.

I have one further announcement to make. This is my first Autumn Statement as Chancellor. After careful consideration, and detailed discussion with the Prime Minister, I have decided that it will also be my last. Mr Speaker I am abolishing the Autumn Statement.

I have hardly anything to announce, especially after my no-spin press office spun most of the measures in advance, but Treasury officials have been trying to persuade chancellors to move the Budget to the autumn since Kenneth Clarke’s time, so why not give the foreign exchange markets a little shock by making them think for a split second that I’m about to resign?

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